ELL Environmental Holdings Limited — Proxy Solicitation & Information Statement 2018

Apr 16, 2018

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult a licensed securities dealer, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Sinotrans Limited, you should at once hand this circular to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

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(A joint stock limited company incorporated in the People’s Republic of China with limited liability) (Stock Code: 0598)

(I) PROPOSED GENERAL MANDATES TO ISSUE AND REPURCHASE SHARES; AND (II) PROPOSED APPOINTMENT OF AUDITOR

Sinotrans Limited will convene Annual General Meeting, the H Shares Class Meeting and the Domestic Shares Class Meeting, particulars of which are set out in the Notices of Annual General Meeting, the H Shares Class Meeting and the Domestic Shares Class Meeting issued by the Company on 16 April 2018.

16 April 2018

CONTENTS

	Page
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
GENERAL MANDATE TO ISSUE SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
GENERAL MANDATE TO REPURCHASE H SHARES . . . . . . . . . . . . . . . . . . . . . . .	5
PROPOSED APPOINTMENT OF AUDITOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
NOTICES OF THE ANNUAL GENERAL MEETING, THE H SHARES
CLASS MEETING AND THE DOMESTIC SHARES CLASS MEETING . . . . . . . . . .	6
DIRECTORS’ RECOMMENDATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
APPENDIX I – EXPLANATORY STATEMENT OF THE
REPURCHASE MANDATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7

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DEFINITIONS

In this circular, unless the context otherwise requires, the following expressions have the following meanings:

“Annual General Meeting” or the annual general meeting of the Company to be held at 1st “AGM” Meeting Room, 11th Floor, Building 10/Sinotrans Tower B, No.5 Anding Road, Chaoyang District, Beijing 100029, the PRC on 31 May 2018 at 9:30 a.m. “Articles of Association” the articles of association of the Company, as amended, modified or otherwise supplemented from time to time “Board” the Board of Directors of the Company “China Merchants” 招商局集團有限公司 (China Merchants Group Limited), a state wholly-owned enterprise established under the laws of the PRC under direct control of the SASAC, the ultimate controlling Shareholder of the Company which holds in aggregate approximately 66.31% of the issued shares of the Company “close associate(s)” has the meaning ascribed to it in the Listing Rules “Company” Sinotrans Limited, a joint stock limited company incorporated in the PRC with limited liability, the H Shares of which are listed on the Stock Exchange “core connected person(s)” has the meaning ascribed to it in the Listing Rules “Directors” the directors of the Company “Domestic Share(s)” domestic invested share(s) of RMB1.00 each in the share capital of the Company “Domestic Shares Class Meeting” the class meeting of holders of Domestic Shares to be held at 1st Meeting Room, 11th Floor, Building 10/Sinotrans Tower B, No.5 Anding Road, Chaoyang District, Beijing 100029, the PRC on 31 May 2018 at 11:00 a.m. or immediately after the conclusion or adjournment of the H Shares Class Meeting “Extraordinary General Meeting” the extraordinary general meeting of the Company to be held at 1st Meeting Room, 11th Floor, Building 10/Sinotrans Tower B, No.5 Anding Road, Chaoyang District, Beijing 100029, the PRC on 31 May 2018 at 10:00 a.m. or immediately after the conclusion or adjournment of the Annual General Meeting “H Share(s)” overseas listed foreign invested share(s) of RMB1.00 each in the share capital of the Company

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DEFINITIONS

“H Shares Class Meeting”	the class meeting of holders of H Shares to be held at 1st Meeting
	Room, 11th Floor, Building 10/Sinotrans Tower B, No.5 Anding
	Road, Chaoyang District, Beijing 100029, the PRC on 31 May 2018
	at 10: 30 a.m. or immediately after the conclusion or adjournment
	of the Extraordinary General Meeting
“HK$”	the lawful currency of Hong Kong
“Hong Kong”	The Hong Kong Special Administrative Region of the PRC
“Latest Practicable Date”	9 April 2018 being the latest practicable date prior to the printing of
	this circular for ascertaining certain information for inclusion in this
	circular
“PRC”	the People’s Republic of China
“RMB”	Renminbi, the lawful currency of the PRC
“Repurchase Mandate”	a general mandate proposed to be granted to the Directors at the
	Annual General Meeting, the H Shares Class Meeting and Domestic
	Shares Class Meeting to exercise the power of the Company to
	repurchase H Shares in the manner as set out in the notices of the
	Annual General Meeting, the H Shares Class Meeting and the
	Domestic Shares Class Meeting issued by the Company on 16 April
	2018
“SASAC”	the State-owned Assets Supervision and Administration
	Commission of the State Council of the PRC
“SFO”	the Securities and Futures Ordinance (Chapter 571 of the laws of
	Hong Kong)
“Share(s)”	H Share(s) and Domestic Share(s)
“Share Issue Mandate”	a general mandate proposed to be granted to the Directors at the
	Annual General Meeting to exercise the power of the Company to
	allot and issue Shares in the manner as set out in the notice of the
	Annual General Meeting issued by the Company on 16 April 2018
“Shareholder(s)”	holder(s) of the Shares

“SINOTRANS & CSC” 中國外運長航集團有限公司 SINOTRANS & CSC Holdings Corporation Limited, the controlling shareholder which directly and indirectly holds in aggregate 42.46% of issued share capital of the Company as at the Latest Practicable Date

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DEFINITIONS

“Stock Exchange” The Stock Exchange of Hong Kong Limited “Takeovers Code” The Hong Kong Code on Takeovers and Mergers

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LETTER FROM THE BOARD

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(A joint stock limited company incorporated in the People’s Republic of China with limited liability) (Stock Code: 0598)

Chairman: Zhao Huxiang Executive Directors: Song Dexing Li Guanpeng Wang Lin Yu Jianmin Wu Xueming Non-executive Director: Jerry Hsu Independent Non-Executive Directors: Guo Minjie Lu Zhengfei Liu Junhai Wang Taiwen

Registered Office: Sinotrans Plaza A, A43, Xizhimen Beidajie Haidian District Beijing People’s Republic of China Headquarters: Building 10/Sinotrans Tower B, No. 5 Anding Road Chaoyang District Beijing, 100029 People’s Republic of China Principal Place of Business in Hong Kong: Unit F & G, 20/F., MG Tower, 133 Hoi Bun Road, Kwun Tong, Kowloon, Hong Kong 16 April 2018

To the Shareholders

Dear Sir and Madam,

(I) PROPOSED GENERAL MANDATES TO ISSUE AND REPURCHASE SHARES; AND (II) PROPOSED APPOINTMENT OF AUDITOR

INTRODUCTION

The purpose of this circular is to (a) provide you with information in respect of the proposed (1) Share Issue Mandate; (2) Repurchase Mandate and (3) the appointment of auditor; (b) set out an explanatory statement regarding the Repurchase Mandate, to enable you to make a decision on whether to vote for or against the relevant resolutions at the forthcoming Annual General Meeting, the H Shares Class Meeting and the Domestic Shares Class Meeting.

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LETTER FROM THE BOARD

(1) GENERAL MANDATE TO ISSUE SHARES

In order to provide flexibility to the Directors to issue Shares in the event that it is desirable to do so quickly, approval will be sought at the Annual General Meeting to grant to the Directors a general mandate to allot, issue and deal with Shares not exceeding 20% of the relevant class of issued share capital of the Company as at the date of passing of the special resolution. Such Share Issue Mandate, if approved, will lapse at the earliest of: (i) the conclusion of the Company’s next annual general meeting; or (ii) the expiration of the 12 month period following the passing of the resolution approving the Share Issue Mandate; or (iii) the revocation or variation of the Share Issue Mandate by a special resolution of the Shareholders in general meeting.

(2) GENERAL MANDATE TO REPURCHASE H SHARES

In order to provide flexibility to the Directors to repurchase H Shares in the event that it is desirable to do so quickly, approval will be sought at the Annual General Meeting, the H Shares Class Meeting and the Domestic Shares Class Meeting to grant to the Directors a general mandate to repurchase H Shares not exceeding 10% of the total H Shares in issue as at the date of passing the special resolutions in the respective meetings. The Repurchase Mandate will be conditional upon the special resolutions for approving the grant of the Repurchase Mandate being passed at each of the Annual General Meeting, the H Shares Class Meeting and the Domestic Shares Class Meeting. Such Repurchase Mandate, if approved, will lapse at the earliest of: (i) conclusion of the Company’s next annual general meeting; or (ii) the expiration of the 12month period following the passing of the resolution approving the Repurchase Mandate; or (iii) the revocation or variation of the Repurchase Mandate by a special resolution of the Shareholders in general meeting.

An explanatory statement containing information regarding the Repurchase Mandate is set out in the Appendix I to this circular.

(3) PROPOSED APPOINTMENT OF AUDITOR

Reference is made to the announcement of the Company dated 26 March 2018 in relation to, inter alia, the proposed change of auditor of the Company. Deloitte Touche Tohmatsu and Deloitte Touche Tohmatsu Certified Public Accountants LLP (“Deloitte”) will retire as auditor of the Company upon expiration of its current term of office at the close of the AGM. According to the relevant regulations issued by SASAC in respect of the term of service of the external auditor continuously appointed by the stateowned enterprise and its subsidiaries, Deloitte will not serve as the international and the PRC auditors of the Company for the year 2018.

The Board has resolved, with the recommendation from the Audit Committee of the Company, to propose the appointment of SHINEWING (HK) CPA Limited and SHINEWING Certified Public Accountants LLP (“SHINEWING”) as the international and the PRC auditors of the Company for the year 2018 (“Proposed Appointment”) to hold office until the conclusion of the next forthcoming annual general meeting of the Company, subject to the approval of the Shareholders at the AGM.

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LETTER FROM THE BOARD

The Company has received a confirmation from Deloitte that there are no matters which needs to be brought to the attention of the Shareholders in relation to its retirement as auditor of the Company. The Board has also confirmed that there is no disagreement between Deloitte and the Company, and there are no other matters in respect of the Proposed Appointment that need to be brought to the attention of the Shareholders.

NOTICES OF THE ANNUAL GENERAL MEETING, THE H SHARES CLASS MEETING AND THE DOMESTIC SHARES CLASS MEETING

Particulars in respect of (i) the Annual General Meeting, which contains, inter alia, special resolutions to approve the Share Issue Mandate and the Repurchase Mandate and the Proposed Appointment; (ii) the H Shares Class Meeting, which contains, inter alia, a special resolution to approve the Repurchase Mandate; and (iii) the Domestic Shares Class Meeting, which contains, inter alia, a special resolution to approve the Repurchase Mandate are set out in the Notices of Annual General Meeting, the H Shares Class Meeting and the Domestic Shares Class Meeting issued by the Company on 16 April 2018.

DIRECTORS’ RECOMMENDATION

The Directors consider that (1) the Share Issue Mandate; (2) the Repurchase Mandate and (3) the Proposed Appointment are in the interests of the Company and its Shareholders. Accordingly, the Directors recommend that the Shareholders vote in favour of the relevant resolutions to be proposed at the Annual General Meeting, the H Shares Class Meeting and the Domestic Shares Class Meeting.

GENERAL INFORMATION

Your attention is drawn to the additional information as set out in the Appendix to this circular.

Yours faithfully, By order of the Board of Sinotrans Limited Li Shichu Joint Company Secretary

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APPENDIX I EXPLANATORY STATEMENT OF THE REPURCHASE MANDATE

This appendix includes an explanatory statement required by the Stock Exchange to be presented to Shareholders concerning the Repurchase Mandate proposed to be granted to the Directors.

1. STOCK EXCHANGE RULES FOR REPURCHASES OF SHARES

The Listing Rules permit companies with a primary listing on the Main Board of Stock Exchange to repurchase their shares on the Main Board of Stock Exchange subject to certain restrictions.

2. FUNDING OF REPURCHASES

Any repurchase will be made out of funds which are legally available for the purpose in accordance with the Articles of Association and the laws of PRC. As compared with the financial position of the Company as at 31 December 2017 (being the date to which the latest audited financial statements of the Company have been made up), the Directors consider that there may not be a material adverse impact on the working capital or on the gearing position of the Company in the event that the proposed repurchases were to be exercised in full at any time during the proposed repurchase period.

The Directors do not propose to exercise the Repurchase Mandate to such an extent as would, in the circumstances, have a material adverse effect on the working capital or the gearing position of the Company which in the opinion of the Directors are from time to time appropriate for the Company.

3. SHARE CAPITAL

As at the Latest Practicable Date, the registered share capital of the Company was RMB6,049,166,644 comprising 3,904,279,644 Domestic Shares and 2,144,887,000 H Shares. Subject to the passing of the proposed resolution for the grant of the Repurchase Mandate and on the basis that no H Shares will be allotted and issued or repurchased by the Company on or prior to the date of the AGM, the H Share Class Meeting and the Domestic Shares Class Meeting, the Company will be allowed under the Repurchase Mandate to repurchase a maximum of 214,488,700 H Shares, being the maximum of 10% of the total H Shares in issue as at the date of passing the relevant resolution.

4. REASONS FOR REPURCHASES

The Directors believe that it is in the best interests of the Company and its Shareholders to have a general authority from the Shareholders to enable the Directors to repurchase Shares on the market. Such repurchases may, depending on market conditions and funding arrangements at the time, lead to an enhancement of the net asset value per Share of the Company and/or its earning per Share and will only be made when the Directors believe that such repurchases will benefit the Company and the Shareholders.

5. UNDERTAKING OF THE DIRECTORS

The Directors have undertaken to the Stock Exchange to exercise the Repurchase Mandate in accordance with the Listing Rules, the Articles of Association and the applicable laws, rules and regulations of the PRC.

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EXPLANATORY STATEMENT OF THE REPURCHASE MANDATE

APPENDIX I

6. EFFECT OF THE TAKEOVERS CODE

If, as a result of the Directors exercising the powers of the Company to repurchase H Shares pursuant to the Repurchase Mandate, a Shareholder’s proportionate interest in the voting rights of the Company increases, such increase will be treated as an acquisition of voting rights for the purpose of the Takeovers Code. As a result, a Shareholder or a group of Shareholders acting in concert, depending on the level of increase of the Shareholder’s interest, could obtain or consolidate control of the Company and become obliged to make a mandatory offer in accordance with Rule 26 of the Takeovers Code.

As at the Latest Practicable Date, to the best of the knowledge and belief of the Directors, China Merchants held in aggregate approximately 66.31% of the issued Shares, including 3,904,279,644 Domestic Shares and 107,183,000 H Shares, of which 2,461,596,200 Domestic Shares and 107,183,000 H Shares were held through SINOTRANS & CSC.

As the shareholdings of China Merchants in the Company is more than 50%, an exercise of the Repurchase Mandate in full will not trigger a bid obligation for China Merchants and its concert parties (including SINOTRANS & CSC) under Rule 26 of the Takeovers Code. In any event, the Directors do not intend to exercise the power to repurchase Shares to an extent which would render the aforesaid Shareholders or any Shareholder or group of Shareholders obliged to make a mandatory offer under Rule 26 of the Takeovers Code. The Board will endeavor to ensure that the exercise of the Repurchase Mandate will not result in less than 25% of the Shares being held by the public.

The Directors are not aware of any consequences that may arise under the Takeovers Code and/or any similar applicable laws of which the Directors are aware, as a result of any repurchase of Shares made under the proposed resolution.

7. DIRECTORS, THEIR CLOSE ASSOCIATES AND CORE CONNECTED PERSONS

None of the Directors nor, to the best of the knowledge and belief of the Directors, having made all reasonable enquiries, any of their respective close associates has any present intention, in the event that the proposed Repurchase Mandate is approved by the Shareholders, to sell any of the H Shares to the Company.

No core connected person of the Company has notified the Company that he/she/it has a present intention to sell any of the H Shares to the Company nor has he/she/it undertaken not to sell any of the H Shares held by him/her/it to the Company in the event that the Company is authorized to make repurchases of H Shares.

8. SHARE REPURCHASE MADE BY THE COMPANY

No repurchase of H Shares (whether on the Stock Exchange or otherwise) has been made by the Company in the preceding six months ending on the Latest Practicable Date.

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EXPLANATORY STATEMENT OF THE REPURCHASE MANDATE

APPENDIX I

9. H SHARE PRICE

The highest and lowest prices at which the H Shares were traded on the Stock Exchange in each of the previous twelve months immediately prior to the Latest Practicable Date were as follows:

	H Shares
	Highest	Lowest
	HK$	HK$
2017
April	3.76	3.39
May	3.85	3.37
June	4.09	3.63
July	4.14	3.70
August	4.67	3.92
September	4.47	3.78
October	4.04	3.63
November	3.96	3.50
December	4.10	3.71
2018
January	4.86	3.84
February	4.96	4.14
March	4.84	4.26
April (up to the Latest Practicable Date)	4.44	4.18

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